Category: EU Law

Shortly after Parliament voted down Theresa May’s Brexit deal by a record margin, three Cabinet ministers spent about an hour on a conference call with executives from major UK businesses. The call was transcribed, and it offers a good insight into the relationship between business and government, and what this means for the Brexit endgame.

The House of Commons voted on the EU Withdrawal Agreement shortly after 7.30pm on the evening of 15 January. The government motion to approve the Agreement was defeated, as everyone knows, by the historically unprecedented margin of 230 votes.

After the vote, three senior Cabinet ministers went straight back to Whitehall where, at 9.30pm, they held a conference call with around 330 executives representing businesses with major operations in the UK.

Inevitably, given the number of people involved, someone recorded the call and leaked a transcript to the press – in this case to the Daily Telegraph, which promptly published the text on its website (here, sheltering behind its paywall).

Aside from the pleasure of feeling like an eavesdropper at the Davos conference, reading the transcript offers a genuine insight into the relationship between government and big business, and the likely next steps in the ongoing Brexit saga.

The Withdrawal Agreement in which the UK has negotiated the terms of its exit from the EU is, according to Angela Merkel, a ‘diplomatic piece of art’. And so it looks from the perspective of most European capitals, given how favourable it is to the long-term interests of the EU. Viewed from the UK, however, it represents one of the most abject failures of statecraft in modern British history. This is the story of how and why it got to be so bad that it has achieved the remarkable feat of uniting both ends of the political spectrum against it.

As is now widely acknowledged across political party lines at Westminster, the EU Withdrawal Agreement, in the form that was endorsed by the Council of Ministers on 25 November 2018, amounts to a strikingly bad deal for the UK.

Less coherent than any other available option, it leaves all of the fundamental issues as to the future unresolved, while committing the UK in international law to processes and outcomes that ought to be unacceptable to any democratic nation state. It concedes most of the UK’s original bargaining positions in return for no permanent benefit, and creates a fatally weak basis for negotiations on a future trade deal. In consequence, its adverse political and economic effects are likely to be worse in the long term than the disruption of a ‘no deal’ Brexit would be in the short term.

Moreover, these defects are not the product of the usual give-and-take of negotiation – a tolerable compromise, acceptable to everyone because it fully satisfies no-one. Instead they are the outcome of a series of avoidable decisions, the most important of them made in No. 10 Downing Street by the Prime Minister personally. As a result, the Agreement represents one of the most abject failures of statecraft in modern British history.

The things that are wrong with this deal can be summarised in four main points. But to understand them, and the Agreement itself, it is important to describe briefly how the UK got itself into this mess.

Edmund Burke, on being elected MP for Bristol, famously told his new constituents that ‘Your representative owes you, not his industry only, but his judgment’. This was his clever way of saying that he was going to make up his own mind about how to vote in the House of Commons, and not feel bound to do whatever the people of Bristol wanted.

The speech, made in 1774, has stood the test of time. It is the classic statement of an MP’s role in a representative democracy. And its sentiments are embodied in constitutional law – MPs have a duty to make up their own minds, even if they were given a clear message by the electorate in a referendum (see Moohan v Lord Advocate at [48]).

A lot of people who do not much like the idea of Brexit are placing a great deal of weight on this. They think that the EU referendum is not the end of the matter, that MPs still have to vote on whether the UK should leave the European Union, and that Parliament is in no way bound by the wishes of the majority as expressed in the referendum result.

This has led to the first piece of post-referendum litigation. But how far is it accurate?

The award of damages is not a remedy traditionally available in judicial review. In public law proceedings, the purpose of a claim is to identify unlawfulness and bring it to an end, not to compensate those who have been affected by it.

In recent years, however, the non-financial purity of judicial review has been eroded by a number of developments. In particular, monetary compensation is now available in some cases where the source of the wrong was non-compliance with either EU law (Francovich damages) or the European Convention on Human Rights (under section 8 of the Human Rights Act 1998).

But does the Administrative Court, without any real track record in this area, have the competence to carry out an assessment of damages in a complex case?

The government has announced that the UK will vote on whether to leave or remain in the European Union on 23 June. Aside from that date, here are five other things we learned about the referendum within the last ten days…

Renewable energy has been subsidised in the UK for at least 25 years. However, the nature, scope and level of the subsidy has been subject to significant change over time. In recent years, due to a range of fiscal and political pressures on the government, various support schemes have been either scaled back or abandoned.

Government subsidies provide an incentive to invest in commercial activities which would otherwise be uneconomic. That is their point. So what happens if a business, having made those investments in the expectation of a subsidy, finds that it is then withdrawn with little or no warning? Does it have any legal right to a notice period, or compensation in lieu of one?

This was the question considered by the High Court in the recent case of Drax v HM Treasury, which has important implications for business planning in any industry which currently benefits from government financial support.

The problem with David Cameron’s long-awaited ‘deal’ with the rest of the EU, aside from the fact that it currently exists only as a set of proposals which will require the agreement of all 27 other member states, is that over the last year he somehow contrived to place on it a weight of expectation that it would always be unable to bear.

The proposals, announced by Council President, Donald Tusk, with a heavy-handed Shakespearean nod to the forthcoming EU referendum – ‘To be, or not to be together, that is the question…’ – are bound to disappoint anyone who fancied that they would signal a radical new direction in the UK’s relationship with the wider EU. But that unrealistic expectation also deflects attention from their most important feature.